NOTE 14 COMMITMENTS AND CONTINGENCIES

Commitments

At December 31, 2016, the Company’s commitments include long-term operating leases covering office space, land and equipment purchase commitments, exploration expenditures, option payments on properties and reclamation costs for the following minimum amounts:


	Payments due by period
	2017		2018		2019		2020		2021		Thereafter		Total
	(in thousands)
Operating lease obligations (office rent)	$	494	$	309	$	315	$	318	$	257	$	512	$	2,205
Operating lease obligations (mining and surface rights)		2,044		2,337		2,332		2,291		2,261		2,466		13,731
Reclamation costs(1)		751		415		690		3,540		2,709		2,810		10,915
Total	$	3,289	$	3,061	$	3,337	$	6,149	$	5,227	$	5,788	$	26,851

(1)

Amounts presented represent the undiscounted uninflated future payments.

For the year ended December 31, 2016, the Company had rental expense under operating leases of $0.4 million (2015 - $0.5 million; 2014 - $0.5 million).

As part of its ongoing business and operations, the Company is required to provide bonding for its environmental reclamation obligations in the United States. These surety bonds are available for draw down by the beneficiary in the event the Company does not perform its reclamation obligations. If the specific reclamation requirements are met, the beneficiary of the surety bonds will release the instrument to the issuing entity. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise. As at December 31, 2016, there were $4.8 million of outstanding surety bonds (2015 - $4.8 million). The annual financing fees are 1.5% of the value of the surety bonds, with an upfront 10% deposit of $0.5 million which is included in Other Assets in the Consolidated Balance Sheet.

Other potential contingencies

The Company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment, and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

The Company and its predecessors have transferred their interest in several mining properties to third parties throughout its history. The Company could remain potentially liable for environmental enforcement actions related to its prior ownership of such properties. However, the Company has no reasonable belief that any violation of relevant environmental laws or regulations has occurred regarding these transferred properties.